COVER STORY : Smoke Rings : Cigars Have Staged a Social and Economic Revival, and Upscale Lounges Have Become Haute Hangouts

Cigars, the odorous pariahs of the anti-smoking age, are rising from the ashes.

In the past, the cigar has typified fat-cat businessmen and back-room dealers. Now, the stogie is staging a social and economic comeback. Sales have surged, and upwardly mobile urbanites find chic pleasure in lighting up.

Not surprisingly, the new popularity of the high-end cigar has triggered a boom in upscale smoking lounges--places that allow the discriminating aficionado to purchase or smoke a cigar in a setting more akin to a gentlemen's club than to a store.

On the Westside, no fewer than a dozen cigar lounges have opened. Beverly Hills alone has six and counting.

"I feel like Beverly Hills is turning into Cigar World, which is great because it promotes the smoking businesses," said Lisa Stafford, manager of one local highbrow cigar store and lounge, Davidoff of Geneva.

Last year, cigar sales increased 7.3% from 1993, says Norman Sharp, president of the industry group Cigar Assn. of America.

The trend has lit up concerns from health care professionals, who say cigar smokers face an increased risk of neck, mouth and lip cancers. They also point out the dangers of secondhand smoke.

However, it's not the fear of carcinogens that dominates the talk in the plush confines of Nazareth's Fine Cigars, the oldest lounge in Beverly Hills.

Owner Nazareth Guluzian presides in the small salon lined with built-in wooden humidors, talking to customers who relax on a pair of diamond-tucked leather couches.

"As a cigar smoker, I wanted to have a place to smoke and relax. No one had such a place," said Guluzian, who has been smoking for more than 20 years. He said that when he opened the lounge in 1985, "people were laughing when I put in couches. They said, 'You think people are going to come and smoke?' "

Now Guluzian counts a large clientele, including producer Norman Lear and actors Sylvester Stallone and Nicolas Cage, who rent Guluzian's private humidors to store their stocks of cigars.

Faced with stringent anti-smoking laws and a public hostile to pungent cigars, lounge patrons say the rooms have become a smoker's haven.

On one Friday afternoon recently, Nazareth's was full of men taking a couple of hours off work, chatting with friends from behind clouds of smoke.

"They talk about sports, O.J., whatever is on the news," said Guluzian. "They try and solve the world's problems in one day."

Divorce attorney Marvin Mitchelson, a smoker for 35 years, said he has visited smoking lounges throughout Europe. To him, relaxing with a cigar in a comfortable lounge is therapeutic.

Besides, Mitchelson said, he faces stiff opposition to lighting up a stogie at home.

"My family looks at me with utter contempt," he said. "I have 29 rooms in my home, and I can't smoke in any of them."

So what prompts the new cigar smoker to brave the wrath of family, friends and nearby strangers and fire up a cigar?

Industry experts and smokers themselves give a variety of answers.

It may be the desire to be extravagant, spending $21.45 for an Aniversario No. 1 from Davidoff.

It could be the feeling of camaraderie that cigar smokers enjoy when discussing their favorite Troya clasico or H. Upmann corona major.

Or perhaps the cigar resurgence was triggered by the 1992 arrival of the glossy quarterly magazine Cigar Aficionado. The magazine's slick profiles of famous cigar smokers, cigar taste-test ratings, and advertisements depicting the rich and successful lent instant glamour to cigar smoking.

Cigars and a cigar smoker's image can hardly be separated, whether the smoker wants to be identified as a big shot in business or as an affluent rebel.

Reinforcing the image of success is the increasing number of celebrities seen smoking, such as late-night talk-show king David Letterman and actors Bill Cosby, Jack Nicholson and Arnold Schwarzenegger.

The cigar mania gave the industry a banner year in 1994, when the total number of cigars sold (2.3 billion) increased for the first time after a steady decline since 1970.

However, cigars are still a long way from competing with cigarettes. The cigar industry accounts for only 1.7% ($790 million) of the $47.6 billion spent on all tobacco products, according to 1994 statistics from the U.S. Department of Agriculture. Cigarettes account for $44.5 billion in sales.

The strongest growth in the market has come from premium cigars, which cost $1 to $20. They are generally hand-rolled, mostly imported and consist of half leaves of tobacco. Sales of premium cigars, which account for about 6% of total cigars sold, jumped 42% from 1989 to 1994, Sharp said.

In fact, the new demand has outstripped supplies, and buyers face long delays for expensive, hand-rolled cigars. In one Beverly Hills tobacco store, frantic customers had to wait eight months for the favored Miami-made La Gloria Cubana cigar.

Evidence of the broadening popularity of cigars can be seen in the changing demographics as younger men and some women begin to reach for petit coronas or short, fat robustos.